Andreas Barckow is no stranger to the IFRS Foundation—he has served on several Foundation advisory bodies. On 1 July 2021, he begins his first term as Chair of the International Accounting Standards Board (Board), taking over from Hans Hoogervorst who finished his second term on 30 June.
Andreas joined the Foundation in April 2021 to ensure a smooth transition period, spending the past few weeks getting to know the organisation and its people. Due to covid-19 travel restrictions, his orientation has so far been purely virtual, so he is looking forward to moving from Bad Homburg, near Frankfurt, to London, where the Foundation is headquartered.
Here, he talks about his career, his experience at the Foundation so far and his priorities for the next few years.
Actually, the number of surprises has been very limited, which may be due to the fact that I have been following the IASB for more than 15 years and have been active in its work over the past six years in one capacity or another. I am looking very much forward to working with our talented and highly motivated people.
I don’t think I can offer a single one-off highlight. There have been many—the legendary jokes of Sir David Tweedie (IASB Chair 2001 to 2011) to ice-break a fierce discussion at the board table, the SEC accepting IFRS accounts of foreign filers with no reconciliation, or, more recently, the rising interest in sustainability have all left their mark. In an active role, working together with other standard-setters in international forums—such as the Accounting Standards Advisory Forum, International Forum of Accounting Standard Setters, World Standard-setters and the European Financial Reporting Advisory Group—has clearly been a highlight of my standard-setting work.
The biggest challenge I see is to remain relevant in an ever-changing environment. While I think that our literature has generally stood the test of time, there have been changes in the environment that clearly could not have been anticipated when the Standards were developed. I am thinking of economies becoming more service than manufacturing oriented. I am thinking of low and negative interest rates and their impact on discounting future cash flows. I am thinking of mega trends such as sustainability, and climate change in particular, as well as the rise of self-generated intellectual property and its non-addressal in the accounts, to name but a few. These and further issues are challenges to our work, but they are at the same time opportunities if we are willing to address them with our eyes wide open. And I have no doubt that we do have the necessary expertise to address them successfully and in a meaningful way.
Accounting is lagging other domains in digitisation. The way we address presentation and disclosure issues in standard-setting still seems be largely guided (and limited) by thinking about a printed page rather than about a screen. I find it curious that every transaction and event we record is originally processed in digital format. However, when it comes to preparing accounts, we aggregate everything to the highest degree possible and make it available in printed format—only to then see people arguing that more disaggregation and availability in digital format would be preferable. Something does not seem right here. The way accounting information is being used changes rapidly, and technology that was appropriate five to 10 years ago may no longer be considered best in class today or tomorrow. So, one to watch and to address.
I want to continue the successful work of my predecessors in building trust globally in IFRS Standards and fostering their consistent application. At the same time, I’d like to help our organisation to become more agile. I realise that this may be easier said than done, as much of the IASB’s work is determined by our current agenda and the due process we follow. The IASB has moved quickly to respond to stakeholder requests, yet its responses have been predominantly reactive rather than proactive. It is to the latter end that I wish to see myself having an impact.
The other area I would like to review is whether we can become more effective in how we communicate with and explain the Board’s decisions to our various stakeholders. Having been at the receiving side of communications, I am aware of perception issues that have arisen, so I would like to work with our organisation to address these.
Seeing my colleagues in person rather than talking to my computer screen all day! I cannot wait to go back to physical meetings. Virtual does have its advantages, no doubt. But it comes with several challenges, too, and I think there is nothing better than a person-to-person conversation in a room.
After school I did a traineeship at a bank, and this paved the way for my interest in economics and business administration more broadly. I always had an interest in international economics, international management, finance, and accounting, so choosing something along those lines seemed logical. And when I was offered a position to do a doctorate in accounting, this got me on track entirely.
Classical music and travelling. My wife and I are regular concert-goers, and we both sing in a chamber choir at our church, with a concert every six to eight weeks in non-covid times. Whether this will remain possible with my new role and commitments, I will have to figure out. My other big interest is travelling the world, and I have been blessed with jobs that have allowed me to visit many places around the globe.
Having done my PhD on the accounting for derivatives and hedging activities, it will probably not come as a surprise to anyone if I said ‘everything that is related to financial instruments’!